Insurance Regulation
Civil penalty for each intentional violation of insurance laws regarding unfair methods of competition
$5,000
Aggregate penalties for intentional violations within 6 months
$50,000
License fee for resident insurance producers
$55
Individuals applying for insurance producer licenses must....
-Be at least 18 -Have not committed any prohibited act -Satisfy the pre-examination requirements, including 3 hours of ethics -Pass the insurance producer licensing exam -Pay all applicable fees -Possess general fitness, competence, and reliability
When applying for insurance producer licenses, business entities must
-Have one or more designated licensees, in good standing with the Department -Apply for licensure in the same lines authority held by the designated licensees -Have not committed any prohibited acts -Be owned, operated, and managed by persons possessing general fitness, competence, and reliability -Pay all applicable fees -Meet any other criteria established by the Department
Insurers must maintain all of their insurance advertisements on file for
4 years
Insurance companies must notify the Commissioner when there is any material change in their ownership, control, surplus or solvency
5 days
Commissioner will examine each insurer
5 years, or as often as necessary
Notice should be given to Third-Party claimants within
60 days
After moving to Pennsylvania for nonresident to become licensed as a resident
90 days
Statute
A formal written law enacted by the legislature, insurance statutes can be found in the state Insurance Code
Advertising
Covers a wide scope of communication, from publishing an ad in a newspaper or magazine, to broadcasting a commercial on television or the Internet
Do Not Call Registry (8 a.m. and 9 p.m.)
Created by the Federal Trade Commission (FTC) and Federal Communications Commission (FCC) which allows consumers to include their phone numbers on a list to which solicitation calls cannot be made by telemarketers
Rebating
Defined as any inducement offered to the insured in the sale of insurance that is not specified in the policy
Fair Credit Reporting Act
Ensures that records are confidential, accurate, relevant, and properly used and also protects consumers against the circulation of inaccurate or obsolete personal or financial information
Notice of Appointment
Every insurer must notify the Insurance Department of all appointments and terminations of appointments of producers in the format and within the time frame specified by the Commissioner
Embezzlement
Failure to submit funds appropriately
Misappropriation of Funds
The term used when a person in a fiduciary position has used funds in a manner for which they were not intended, such as the wrongful taking or use of money belonging to another.
Insolvent
Unable to meet financial obligations
Violations and Penalties
Violation, Hearing, Cease and Desist, Other Penalties
Consumer Reports
Written and/or oral information regarding a consumer's credit, character, reputation, or habits collected by a reporting agency from employment records, credit reports, and other public sources
Insurers are forbidden from negotiating directly with claimants who are not represented
by an attorney
Gramm-Leach-Bliley Act
requires financial institutions to ensure the security and confidentiality of customer data
Cease and Desist
to stop or discontinue
Civil penalty for each unintentional violation of insurance laws regarding unfair methods of competition
$1,000
The insurer must send written notice to the claimant in a third party liability claim upon payment of more than
$1,000
Aggregate penalties for unintentional violations within 6 months
$10,000
Fine per day for failure to correct any violation
$100
License fee for nonresident insurance producers
$110
Lapsed license fee
$165
To report action taken against producer in another jurisdiction or charges of criminal conduct
30 days
Waiting period before rate filings go into effect
30 days
To reinstate a lapsed license with current effective date
1 year
Hearing on rate filing after insurer is informed of disapproval
10 days
Written notice of hearing for a person suspected of prohibited behavior
10 days
After receiving notification of a claim, Insurers must provide the necessary claims forms within
10 working days
Insurers must acknowledge the receipts of claims or any other pertinent communication within
10 working days
If the insurer needs more time in the decision process of a claim, notice should be provided within
15 days
Insurers should accept or deny any claims within
15 days
To correct the violation if a person failed to respond to the Department's inquiry
15 days
If licensee fails to reply to inquiry, the Department will send a notice specifying the violation and give the licensee the ability to correct the violation within
15 days and $100 per day per violation
Insurers must respond to inquiries from the Department within
15 working days
Age requirement for resident producer license
18 y/o
Temporary producer's license valid without written examination
180 days
Advertisements, after approval, may be used for
2 years
License renewal period
2 years
Continuing education required every 2 years
24 hours
Continuing education that may be carried to the next renewal period
24 hours
Ethics education included in prelicensing education requirements
3 hours
Rating organization licenses which are done by the Commissioner remain in effect for
3 years
Change of address for producers licensed in Pennsylvania must be provided to the Department in writing within
30 days
Financial institutions are prohibited from sharing insurance coverage information with a third party for the purpose of selling or soliciting UNLESS notice is given, and the customer does not sign and return a form within
30 days
For Commissioner to approve or disapprove changes to a form
30 days
Insurers must complete investigations related to claims within
30 days
Insurers must file all mail-order solicitations with the Department prior to their first publication within
30 days
Licensees are required to provide a written response to a Department's inquiry within
30 days
Notice should be given to First-Party claimants within
30 days
To notify the Department of changes of address
30 days
To provide a response to the Departments inquiry
30 days
Reporting of Actions
A licensee must report any administrative action taken against him in another jurisdiction or state within 30 days of the final disposition of the matter. If charged, licensee must provide proper documents to the Department within 30 days
Exclusive General Agent
A licensee which has been granted sole authority to act directly or indirectly as an insurance producer for a domestic insurer with respect to a specific portion of the insurer's business or within a specific territory, has the authority to bind coverage on behalf of the insurer and either separately or together with affiliates or subproducers
Twisting
A misrepresentation, or incomplete or fraudulent comparison of insurance policies that persuades an insured/owner, to his or her detriment, to cancel, lapse, switch policies, or take out a policy with another insurer
Reciprocity/Reciprocal
A mutual interchange of rights and privileges
Manager
A person that negotiates and binds ceding reinsurance contracts on behalf of a domestic insurer or manages all or part of the insurance business of an insurer and does not act as an agent for that insurer
Producer
A person who sells, solicits or negotiates contracts of insurance
Line of Authority
A type of insurance a producer or a business entity is authorized to transact
Unfair Discrimination
Adjusting rates, premiums, or policy benefits for persons within the same class or with the same life expectancy is illegal
Fiduciary Responsibility
Agent/producer who handles the funds of the insured and the insurer
Assumed Names
An insurance producer license issued by the Department will only be issued in the name of the applicant or business entity. If a licensee is doing business under a fictitious name other than the name appearing on the producer license, the licensee is required to notify the Commissioner in writing prior to use of the fictitious name
Representative of the Insurer
An insurance producer may not act on behalf of an insurer unless the insurance producer is appointed by the insurer
Inducement
An offer that attempts to influence the other party
A Surrender Comparison Index Disclosure must be given to all:
Applicants for a life insurance policy
ALL FORMS, including changes to previously approved forms, must be filed for approval within 30 days to the
Commissioner
Coercion
Forceful act or threat aimed to influence a person to act against his or her will
Companies must keep records of complaints for at least:
Four years
Commissioner
Head of the state Department of Insurance. Appointed by the Governor with consent of the Senate and holds office for 4 years, until a successor is appointed and qualified
False Advertising
Inclusion of any untrue, deceptive, or misleading statements that apply to business of insurance or anyone who conducts it.
Investigative Consumer Reports
Information obtained through an investigation and interviews with associates, friends and neighbors of the consumer
Aggrieved
Injured party; someone entitled to begin a lawsuit or request a hearing
Commissioner Duties
Licensing insurance producers and companies, and approving, administering, or contracting the administration of the prelicensing education courses, insurance producer licensing examinations, and CE programs
Violation of Fiduciary Responsibility
Misdemeanor and subject to fine of $5,000 for each violation or 6 months of imprisonment
Violations of Policy Rates and Forms
Misdemeanor charges and fine up to $500
Defamation
Occurs when an oral or written statement is made that is intended to injure a person engaged in the insurance business and also apply to statements that are maliciously critical of the financial condition of any person or a company
Commission
Payment to the agent by the insurance company for placing insurance, usually a percentage of the policy premium
Fiduciary
Someone in a position of trust
Home Office (Domicile)
State in which an insurer is ogranized and has its main place of business
The Commissioner may impose the following additional charges of violating Policies
Suspend the license of the offending person Refuse to issue a new license to this person for 1 year Issue a fine of up to $1000 for each violation
Misrepresentation
issuing, publishing, or circulating any illustration or sales material that is false, misleading, or deceptive as to policy benefits or terms, the payment of dividends, etc.